Crowdfunding in the Mediterranean: humble but promising beginnings
Younes Djama - 21/12/2014
Crowdfunding, or participative financing through web platforms, is still embryonic in the Maghreb countries, where there are very few platforms to rely on. As told by the participants in the first meeting on “Crowdfunding in the Mediterranean”, held in Marseille within the framework of the Mediterranean Economic Week, between 5-8 November.
A study conducted two months ago for the Financement participatif Méditerranée (Mediterranean Participatory Financing - FPM) association on the state-of-the-art of crowdfunding in certain Mediterranean countries, was presented on this occasion by Thameur Hemdane, co-president of the association. Preliminary results show that this type of “popular patronage” is still very little developed in the region.
In Algeria, as well as in Tunisia and Morocco, the funds raised through this system are around 200,000 euros, explained Hemdane. However Hemdane is optimistic about the future prospects of crowdfunding in these countries. "Crowdfunding will expand here like in the rest of the world" he says, because it involves directly citizenship and liability. How? “It is the citizens who can decide the destination of their own savings. The current absence of a clear regulatory framework for crowdfunding platforms means that they don’t have the effective right to operate”, notes Hemdane. “The Moroccan, Algerian and Tunisian platforms operate from offices in France, where crowdfunding is regulated”. And it is very difficult for such a platform to begin to operate without a clear legislative framework. “For this reason only the mechanism of direct donation, which has a simpler regulation, works currently.”
Twiiza.com, the only crowdfunding platform in Algeria
According Thameur Hemdane “twiiza.com” is the only currently active crowdfunding platform in Algeria. But others are expected to be born. Born to be “another way to give life to a project”, twiiza.com has a very simple function, based on the presentation of creative, cultural, artistic, ecological projects or innovative firms by their creators and the possibility for the public to directly finance individual projects on the platform. Donors can also follow the evolution of a project to which they have chosen to contribute, as well as interact with the creators of the projects, to encourage them, thus building a relationship that is not only financial but also humane. There are two basic principles that guide the site: that the donors themselves become promoters of the platform, and valorize every successful project so that others may follow the suit. Also because, “a project that makes us glad to discover is shared more easily”.
Crowdfunding evolves in Morocco
FPM’s study shows that in Morocco is the country where crowdfunding is taking hold most. In the research, two platforms that are already active are identified, but many other projects are underway, according to Arnaud Pinier from Smala&Co, one of the existing platforms. As a proof of this interest, Pinier mentions more than 120 projects funded through French or American crowdfunding platforms that have Moroccan territory as their object, be they cultural or charity projects. Seventy of these projects were funded through crowdfunding campaigns lasting at least 45 days, for a total average of 33,000 dirhams per project. In 2014 about sixty projects were registered, with a success rate in collecting funds at 60 %. Between 2010 and 2013 there were 42, points Arnaud Pinier. Of the projects funded totally through crowdfunding in Morocco, 83% are on social assistance. Pinier underlines that a roof of 2 million dirhams is expected to be reached in 2014, while for 2016 it is estimated that 10 million dirhams will be raised through crowdfunding, amounting to 1 million euros.
The crowdfunding phenomenon
Crowdfunding is a growing phenomenon across the world. In 2013 the funds collected reached 5 billion dollars, while in 2014 this amount rose to 11 billion. The forecast for the next 5 years point to an increase of around 1000 billion dollars! It should be noted, however, that 90 % of these funds are collected and allocated to projects in Europe and North America. But as states André Jauney, the other co-president of FPM, it certainly is a phenomenon growing exponentially.